RAM PROSAD SURAJMULL Vs. MOHAN LAL LACHMINARAIN

JUDGEMENT

(1.) This is an appeal from a judgment of Mr. Justice Greaves, whereby he has, on an application by the respondents, directed an award made by the Bengal Chamber of Commerce Arbitration Tribunal on the 10th June 1919 to be taken off the file as of no effect.

(2.) The events which led to the award are not in controversy and may be briefly recited on the 16th August 1918 the respondents sold to the appellants 100 bales of Japanese grey shirtings which had been purchased by. them from the Nippon Munka Kabusbiki. Kaisa (Japan Cotton Trading Co.). The respondents allege that the appellants failed to take delivery, with the result that they had to re sell the goods at a loss. On the 3rd May 1919 the buyers made a referenee to the Arbitration Tribunal of the Bengal Chamber of Commerce under the arbitration Clause contained in the contract. On the 2lot May 1919 the sellers instituted a suit for damages for breach of contract. On the 2Cth June 1919 the award was made, and on the (sic)th July following, it was filed in Court. On the 22od July the sellers applied to set aside the award. Mr. Justice Greaves has granted that application on the ground that, where an action has been commented (upon a contract which contains a provision for reference to arbitration, even if a, reference to arbitration has been made before the commencement of the suit, the award is of no effect unless the suit has been stayed pending the arbitration. In support of this view, reliance has been placed upon the decision of the majority of the Court of Appeal in Doleman of Sent v. Ossett Corporation (1913) 8 K.B 257 : 81 L.J.K.B. 1092 : 107 L.T. 581 : 76 J.P. 457 : 10 L.G.R. 915, which has been applied in this country in Dinabandhu Jana v. Durga Prasad Jana 51 Ind. Cas. 80 : 46 C. 1041 : 29 C.L.J. 399 : 23 C.W.N. 716 and Appatu Rowther v. Seeni Rowther 42 Ind. Cas. 514 : 41 M. 115 : 33 M.L.J. 177 : 6 L.W. 243.

(3.) In Doleman Sons v. Ossett Corporation (1913) 8 K.B 257 : 81 L.J.K.B. 1092 : 107 L.T. 581 : 76 J.P. 457 : 10 L.G.R. 915. Fletcher Moulton, L.J., explained the position of the parties, when, notwithstanding an arbitration clause in the contract between them, a suit has been instituted by one of them, the law will not enforce the specific performance of an agreement to refer to arbitration, but if duly appealed to it has the power, in its discretion, to refuse to a party the alternative of having the dispute settled by a Court of Law, and thus to leave him in the position of having no other remedy than to proceed by arbitration, if the Court has refused to stay an Potion or if the defendant has abstained from asking it to do so, the Court has seisin of the dispute and it is by its decision and by its decision alone, that the rights of the parties are settled. It follows that, in the latter case, the private tribunal, if it has ever come into existence, is functus officio, unless the parties agree de novo that the dispute shall be tried by arbitration and that the action itself shall be referred, There cannot be two tribunals, each with jurisdiction to insist on deciding the rights of the parties and to compel them to adept its decision. This is clearly involved in the proposition that the Courts will not allow their jurisdiction to be ousted. The same view was adopted by Farwell, L.J., when he stated that the plaintiffs cannot be deprived of their right to have recourse to the Court when the agreement is a mere agreement to refer, unless the Court makes an order to that effect under Section 4 of the English Arbitration Act, 1839, (corresponding to Section 19 of the Indian Arbitration Act, 1899): They oar, of course, deprive themselves of snob rights by their own act after writ, as, for example, by going on with the arbitration and obtaining an award; but when nothing has been done by them since writ, and the only matter relied upon is an award made since writ, without their knowledge or consent, under an agreement antecedent to the action, the plea is in fact and in truth a pled of the agreement and is bad, he since there in act of the plaintiffs subsequent to the writ on which reliance can be succeed. It is not a question of revoking the submission; it is a question of punctuation of Section 4 of the Act. The appellants have contended before us that the present case falls within the exception formulated by Farwell, L.J., by reason of the letter, dated the 10th June 1919, written by the respondents to the appellants. The letter, in our opinion, has no such effect; but we must not be taken of endorse the view that the respondents could deprive themselves of their right of suit by their own note, a position which may be difficult to recouncile with the view taken by Fletcher-Moulton, L.J., namely, that as soon as a suit is instituted the private tribunal becomes functus officio. Our con-elusion, therefore, in that the view taken by Mr. Justice Greaves is right and that this appeal must be dismissed with costs. Ernest Fletcher, J.